Three major industry associations announced that they will work cooperatively to obtain relief for their members affected by the steel safeguard program, seek a closer review by the government on the effects of the program on producers of motor vehicle products, and discuss future policy options.
Section 201 tariffs on imported steel, implemented in March 2002, have adversely affected automotive suppliers nationwide. The announcement was made by the Automotive Aftermarket Industry Association (AAIA), Motor & Equipment Manufacturers Association (MEMA) and Specialty Equipment Market Association (SEMA).
Upon its introduction, the steel safeguard program imposed tariffs of up to 30% on imported steel and sparked an immediate increase in the price of steel in the United States. These raw material cost increases, as related to domestically produced steel, have ranged from 20% to 50%.
The program continues to impose significant hardships on automotive product manufacturers, exposing them not only to climbing steel prices, but also to slower deliveries and widespread shortages.
American producers of motor vehicle products, who traditionally purchase an estimated 95% of their steel from domestic sources, are facing a number of drastic measures such as layoffs, plant slowdowns and shutdowns, and profit warnings as a result of this program. US suppliers have begun to lose business to foreign competitors that can purchase steel at global prices and do not face the pressure of the tariffs. In many other cases, the squeeze on steel is forcing US producers of motor vehicle products to import finished products that before were made in America.
Section 201 tariffs pose a critical threat to the overall US automotive supply chain, which greatly depends on a just-in-time production system and on availability of adequate quantities of high-quality steel for its products.
The associations' collaboration will strengthen this ongoing effort and benefit member companies by creating a more unified voice to address the impact of steel tariffs on producers of motor vehicle products. At the same time, the associations will continue to support the administration in its efforts to find long-term solutions to the problem of excess global steel capacity.